Before 2004, business owners were buying Hummer’s and writing off 100% of the value as a Section 179 expense. The government didn’t like this so they closed the “loophole” and imposed a limit of $25,000 Section 179 write off for heavy SUVs.
Under the 2010 Tax Relief Act, the bonus first-year depreciation percentage is 100% (instead of 50%) for bonus-depreciation-eligible “qualified property” that is placed in service after Sept. 8, 2010 and before Jan. 1, 2012. Passenger automobiles and trucks have a limit on bonus depreciation of $8,000. But, heavy SUV’s are exempt from the luxury automobile rules and eligible for full bonus depreciation.
Thus, a taxpayer that buys and places in service a new heavy SUV after Sept. 8, 2010 and before Jan. 1, 2012, and uses it 100% for business, may write off its entire cost.
Of course buying a Hummer now might not be such a wise decision. You may be able to deduct 100% of the cost of it but, you are going to have to pay more to fuel it up, and in these economic times that may well take your business under.
4025 Automation Way #D1 (Map)
Fort Collins, CO 80525
Phone: 970-226-4686